Radio stations, music industry disagree over whether artists deserve payment for song play

by Kathleen ThurberMidland Reporter-Telegram

Published 7:00 pm, Friday, April 23, 2010

Those tunes flitting over many a car radio speaker during the morning commute might come at a higher price if legislation that's been sitting in both the Senate and House gets another look.

In what's known as the Performance Rights Act Bill lawmakers proposed more than a year ago, most commercial radio stations would be required to pay a fee to artists for playing their music.

Satellite radio, cable television and Internet services already pay such charges, lobbyists argue, and there's no reason the radio industry should be permitted to earn billions in advertising revenue without having to pay for the use of copyrighted songs that fetch them so many listeners.

"It's not a tax, it's a royalty," said Martin Machowsky with music industry lobbying group musicFirst. "They play music, that's their business. Tell me any other business that can get it's principal product for free."

Radio stations, though, argue the additional cost would not only be unfair, as they provide the free promotion that lifts most musicians' careers, but also would send some out of business, driving up costs in what's already a struggling economy.

"It's detrimental to everyone," said Texas Association of Broadcasters Vice President Oscar Rodriguez. "No matter the size of the operation they're going to be hit hard."

Over-the-air radio stations, Rodriguez said, can't be compared to satellite or online music because those mediums charge customers a fee for the service commercial radio stations long have offered for free.

Local radio stations agree with Rodriguez, adding they already pay fees to the songwriters. Their relationship with artists, they said, always has been a give-and-take, artists providing content and benefiting when listeners purchase music, products and concert tickets.

"If we're paying the guys who wrote the songs and now have to pay the guys who sing the songs maybe the guys who sing the songs should pay the guys who wrote the songs and we'll just switch our payments," said Scott Parsons, general manager at West Texas Radio Group, which runs KQRX, KMCM and KHKX.

As a locally owned radio group, said Robert Hallmark with ICA Radio, any increased costs would have to be passed down to consumers through higher advertising fees.

"It's just going to trickle back down to the consumer at some level," Hallmark said. "Advertising will cost more. If it costs the shoe store more to advertise (they'll) charge more for shoes. It's not a good thing we believe."

ICA Radio runs KMRK, KCRS, KFZX and KCHX.

The measure was approved in the judiciary committees of both the Senate and House in 2009, but hasn't been acted on since. The Commerce Department announced its support for the bill in recent weeks saying it should have been done years ago as a matter of fairness to the artists.

"Ideally it would have been passed 80 years ago when radio stations started playing musicians for free," Machowsky said.

Congressman Mike Conaway co-sponsored a resolution countering the bill and arguing Congress should not impose any performance fee that would essentially disrupt what's always been a "mutually beneficial relationship between local radio and the recording industry," according to the resolution. Nearly 300 in Congress, many of whose names were included on the resolution, have voiced their opposition to the bill.

Local radio stations said they appreciate Conaway's support. But, Rodriguez said if the bill is ignored or unable to get through this year they anticipate similar legislation will pop up again.

"If the record labels this year fail we will still be fighting it again next year," Rodriguez said.

Machowsky says the bill is fair to smaller stations in that some would only pay $100 to $500 a year extra in fees. The bill proposes charging any station earning less than $1.25 million in gross income a flat annual fee in leiu of royalty payments. Exemptions also are offered for some stations such as those that broadcast religious services.

Artists, Machowsky said, benefit no more from free promotion than do radio stations, which promote themselves based on the music they play. Most artists now, he said, gain their popularity on MySpace or YouTube before hitting the airwaves and aren't generating their sales solely on radio play.

"It's fair to artists and musicians' products they use," he said, of the proposition.

Local station managers disagree.

"I realize they're getting hurt by the Internet product," Hallmark said. "They're just looking for a way to get more money out of this deal. Radio is getting hit the same way."

In addition to offering promotion, he and Rodriguez said radio stations offer a public service by airing things like Amber alerts, weather updates, news and free community service announcements. Satellite and Internet carriers, he said, don't do that.

"I'm afraid this one is just a little unfair," Hallmark said. "I think it will change the whole context of radio."